Targeted M&A deal value in Europe fell to $146.6bn (£94.8bn) in the three months to the end of September, the lowest quarterly value experienced since the second quarter of 2004, according to preliminary estimates from Dealogic.
That compares to $214.3bn seen in the third quarter a year ago, and points to serious weakness in sentiment among European chief executives amid mounting fears over the Eurozone debt crisis.
But European M&A value rose 11 per cent to $614.4bn over the year to date, from $552.7bn in 2010.
The UK saw the most M&A deals of all European countries as cross-border deals surged to a record high, but year-to-date deal value was nine per cent down on 2010, at $119.3bn.
Global M&A deals fell 23 per cent in the third quarter, to $599bn.